Foghorn Therapeutics Inc.

Foghorn Therapeutics Inc. is a clinical-stage precision therapeutics biotechnology company focused on pioneering a new class of medicines by correcting abnormal gene expression through selectively targeting the chromatin regulatory system ¹. This system, which orchestrates gene expression, is implicated in approximately 50% of all cancers ². The company states it is the only entity with the ability to study and target this system at scale, in context, and in an integrated way ³. Their proprietary Gene Traffic Control® platform provides a mechanistic understanding of how chromatin regulatory system components interact, enabling the identification, validation, and drugging of targets within this system ⁴.

The company's core business model revolves around the discovery and development of small molecule product candidates, including protein degraders, allosteric enzymatic inhibitors, and transcription factor disruptors, that target genetically determined dependencies within the chromatin regulatory system ⁵. Their primary customer segments, once products are commercialized, are expected to be oncologists in the United States, with third-party distribution arrangements planned for ex-U.S. markets ⁶. Revenue is currently generated through collaboration agreements, with a significant portion derived from an upfront payment and equity investment from Eli Lilly and Company (Lilly) ⁷.

Foghorn's pipeline includes more than seven programs, with one clinical-stage drug candidate, FHD-909, currently in Phase 1 development ⁸. They have discovered highly selective chemical matter for challenging oncology targets such as SMARCA2 (BRM), CBP, EP300, and ARID1B, in addition to other undisclosed targets ⁹. The company believes its current pipeline has the potential to help more than 500,000 cancer patients ¹⁰.

FHD-909 (LY4050784) is a first-in-class oral SMARCA2 selective inhibitor that has shown high selectivity over its paralog SMARCA4 in preclinical studies ¹¹. SMARCA4 is mutated in up to 10% of non-small cell lung cancer (NSCLC) and implicated in numerous solid tumors, creating a dependency on SMARCA2 when mutated ¹². Lilly initiated a Phase 1 dose escalation trial for FHD-909 in SMARCA4 mutated cancers, with NSCLC as the primary patient population, in October 2024 ¹³. The company is also developing a selective SMARCA2 degrader, which activates the cell's ubiquitin proteasome degradation system to selectively destroy SMARCA2 while sparing SMARCA4 ¹⁴.

Beyond SMARCA2, Foghorn is developing a selective CBP degrader for EP300 mutated and CBP-dependent cancers, including bladder, endometrial, colorectal, breast, gastric, and lung cancers, which have an annual U.S. incidence exceeding 500,000 ¹⁵. Preclinical data for the CBP degrader, FHT-CBPd-9, demonstrated tumor growth inhibition in bladder models and tumor regression in gastric models, without causing thrombocytopenia, a side effect observed with dual CBP and EP300 inhibitors ¹⁶. A selective EP300 degrader is also in development for EP300 dependent cancers and CBP mutated cancers, such as multiple myeloma, diffuse large B-cell lymphoma (DLBCL), acute myeloid leukemia, and myelodysplastic syndrome, with an annual U.S. incidence exceeding 100,000 ¹⁷. The EP300 degrader, FHT-EP300d-32, showed significant tumor growth inhibition in multiple myeloma, DLBCL, and AR+ prostate models, outperforming enzalutamide in the latter ¹⁸. Additionally, a selective ARID1B degrader is being developed for ARID1A mutated cancers, including endometrial, gastric, gastroesophageal junction, bladder, and NSCLC, affecting over 300,000 patients annually in the U.S. ¹⁹.

For the fiscal year ended December 31, 2025, Foghorn reported collaboration revenue of $30.9 million ²⁰, an increase from $22.6 million in 2024 ²¹. The net loss for 2025 was $74.3 million ²², an improvement from a net loss of $86.6 million in 2024 ²³. Basic and diluted EPS for 2025 was $(1.18) ²⁴, compared to $(1.58) in 2024 ²⁵. Operating activities used $86.1 million of cash in 2025 ²⁶, while investing activities provided $112.0 million ²⁷, and financing activities provided $1.0 million ²⁸. As of December 31, 2025, the company had cash, cash equivalents, and marketable securities totaling $158.9 million ²⁹, and an accumulated deficit of $632.5 million ³⁰.

Year-over-year, collaboration revenue increased by $8.3 million ³¹, driven by the continued advancement of programs under the Lilly Collaboration Agreement ³². Total operating expenses decreased by $7.987 million to $117.298 million in 2025 from $125.285 million in 2024 ³³. Research and development expenses decreased by $9.062 million to $85.466 million in 2025 from $94.528 million in 2024 ³⁴. This decrease was primarily due to a $10.2 million reduction in FHD-286 costs following the discontinuation of its independent development in AML and uveal melanoma, and a $1.7 million decrease in early development and other research external costs due to decreased FHD-609 spend and program progression ³⁵. Partially offsetting these reductions was a $5.2 million increase in Lilly partnered programs, driven by the initiation of the Phase 1 dose escalation study of FHD-909 ³⁶. General and administrative expenses decreased by $0.809 million to $27.550 million in 2025 from $28.359 million in 2024, mainly due to a $0.9 million decrease in facilities and IT related expenses following a lease modification ³⁷. The company also recorded a gain on lease modification of $1.6 million in 2025 ³⁸ and an impairment of long-lived assets of $5.9 million in 2025 ³⁹, compared to $2.4 million in 2024 ⁴⁰.

During the reported period, Lilly initiated a Phase 1 dose escalation trial with FHD-909 in October 2024 ⁴¹. In December 2024, Foghorn decided to discontinue the independent development of FHD-286 in combination with decitabine for relapsed and/or refractory acute myeloid leukemia, and also terminated the independent development of FHD-286 in uveal melanoma ⁴². The company also completed a May 2024 offering, selling 12,743,039 shares of common stock and pre-funded warrants for 7,220,794 shares, generating net proceeds of $102.8 million ⁴³. In the fourth quarter of 2025, 101,174 shares were sold through an at-the-market facility for $0.5 million ⁴⁴. The company also entered into a new lease agreement for 72,846 square feet of office and laboratory space in Watertown, Massachusetts, with the term commencing in December 2025 and expiring in September 2035 ⁴⁵.

Foghorn Therapeutics expects its expenses and capital requirements to increase substantially in connection with ongoing activities, particularly as it continues to fund existing and potential future clinical activities, including the Phase 1 clinical trial of FHD-909 partnered with Lilly, advances preclinical activities, and initiates clinical trials for other product candidates ⁴⁶. The company anticipates needing substantial additional funding to support its continuing operations and growth strategy ⁴⁷. As of the issuance date of the consolidated financial statements, the company expects its cash, cash equivalents, and marketable securities to be sufficient to fund operating expenses and capital expenditure requirements for at least twelve months ⁴⁸.

A major growth area for Foghorn is the expansion of its precision oncology pipeline by developing proprietary enzymatic inhibitors, degraders, and disruptors targeting genetically defined dependencies within the chromatin regulatory system ⁴⁹. The company has identified four distinct targets: SMARCA2, CBP, EP300, and ARID1B, which have genetically determined dependencies ⁵⁰. Foghorn believes it has the potential to file four Investigational New Drug Applications (INDs) over the next two years ⁵¹. This strategy aims to deepen its precision therapeutics approach in oncology and potentially expand into other therapeutic areas ⁵².

Another significant growth vector involves harnessing the Gene Traffic Control platform to develop novel product candidates for therapeutic areas beyond oncology ⁵³. Given the chromatin regulatory system's role in orchestrating gene expression, it has implications in a wide array of diseases, including virology, autoimmune disease, and neurology ⁵⁴. The company is committed to applying its platform to these additional therapeutic areas over time, aiming to build a long-term pipeline of novel product candidates to address high unmet medical needs ⁵⁵.

Regarding operational outlook, the company expects its research and development expenses to increase in the future as programs advance into clinical development and discovery, research, and preclinical activities continue ⁵⁶. General and administrative expenses are also anticipated to increase due to continued support for research activities, program and platform development, and costs associated with operating as a public company ⁵⁷. The company has implemented a two-year accelerated expensing for domestic R&D costs incurred during taxable years ending after December 31, 2021, and before January 1, 2025, with $75.2 million remaining unamortized as of December 31, 2025 ⁵⁸.

In terms of capital allocation, Foghorn will be required to obtain further funding through public or private equity offerings, debt financings, collaborations, and licensing arrangements or other sources ⁵⁹. A subsequent event on January 9, 2026, involved entering into securities purchase agreements for the issuance and sale of 2,030,314 shares of common stock and pre-funded warrants to purchase 5,421,250 shares of common stock, along with Series 1 and Series 2 Warrants to purchase an aggregate of 7,451,564 shares of common stock ⁶⁰. The offering generated approximately $50.0 million in gross proceeds before offering expenses, excluding any proceeds from warrant exercises ⁶¹. The Series 1 Warrants have an initial exercise price of $13.42 per share and expire on June 30, 2027 ⁶², while Series 2 Warrants have an initial exercise price of $20.13 per share and expire on December 31, 2030 ⁶³.

The company explicitly flags structural headwinds and execution risks, noting that its ability to generate product revenue or achieve profitability depends on the successful development and eventual commercialization of one or more product candidates ⁶⁴. This requires success in identifying candidates, completing preclinical and clinical trials, obtaining marketing approval, manufacturing, marketing, selling, and satisfying post-marketing requirements ⁶⁵. The company cannot accurately predict the timing or amount of increased expenses or when, or if, it will achieve or maintain profitability ⁶⁶.

Geographic, regulatory, and macro factors identified as constraints include unfavorable global macroeconomic conditions, geopolitical trends, and armed conflicts, which could adversely affect business, financial condition, or results of operations ⁶⁷. A severe or prolonged economic downturn or global financial/political crises could weaken demand for product candidates or impact the ability to raise additional capital ⁶⁸. Supply chain disruptions due to a weak or declining economy are also a risk ⁶⁹. Furthermore, the company relies on third-party contract development and manufacturing organizations (CDMOs) and contract research organizations (CROs), some located outside the United States, including China, which exposes them to risks from adverse legislation or administrative restrictions ⁷⁰.

The company faces material risks including its limited operating history and absence of approved products, leading to expected losses for the foreseeable future and a potential inability to achieve or maintain profitability ⁷¹. Substantial additional funding will be required, and failure to raise capital on acceptable terms could force delays, reductions, or elimination of research and product development programs or commercialization efforts ⁷². The success of product candidates, currently in preclinical and early clinical development, is highly uncertain, with a high risk of failure in clinical trials to demonstrate safety and efficacy, potentially delaying or preventing regulatory approval ⁷³. There is substantial competition from major pharmaceutical, specialty pharmaceutical, and biotechnology companies with greater resources, which could lead to competitors developing or commercializing products more rapidly or with superior profiles ⁷⁴. The company is highly dependent on key personnel, and an inability to attract and retain qualified individuals could hinder business strategy implementation ⁷⁵. Inadequate protection of proprietary technology and platform, or insufficient patent protection, could allow competitors to develop similar products, impairing commercialization ⁷⁶. Unfavorable global macroeconomic conditions, geopolitical trends, and armed conflicts, along with legislative and administrative actions, could adversely affect business, financial condition, or results of operations ⁷⁷. Internal computer systems or those of third-party CROs/contractors are vulnerable to security breaches, potentially disrupting development programs, causing data loss, or leading to regulatory investigations and litigation ⁷⁸. The use of artificial intelligence and machine learning also introduces operational, regulatory, legal, and ethical risks, including data quality, transparency, model reliability, cybersecurity, intellectual property, privacy, discrimination, liability, and vendor/supply chain dependencies ⁷⁹.

Management's overall tone emphasizes the pioneering nature of Foghorn Therapeutics in targeting the chromatin regulatory system to correct abnormal gene expression for serious diseases, particularly in oncology, with potential in immunology and inflammation ⁸⁰. They highlight the proprietary Gene Traffic Control® platform as providing unique insights and scalability in this previously untapped area ⁸¹. Management believes the current pipeline has the potential to help more than 500,000 cancer patients ⁸² and expects to file four Investigational New Drug Applications (INDs) over the next two years ⁸³. The strategic collaboration with Lilly, including the Phase 1 dose escalation trial for FHD-909, is presented as a confirmation of the rigor of their science and the importance of their targets ⁸⁴. The three strategic priorities emphasized for the period ahead are to advance the lead precision oncology product candidate, FHD-909, through clinical development with Lilly in NSCLC and select solid tumors ⁸⁵; to expand the precision oncology pipeline by developing proprietary enzymatic inhibitors, degraders, and disruptors targeting genetically defined dependencies ⁸⁶; and to harness the platform to develop novel product candidates for therapeutic areas beyond oncology, such as virology, autoimmune disease, and neurology ⁸⁷. Management also stresses the commitment to continuously enhancing the platform and selectively entering into additional strategic partnerships to maximize pipeline and platform potential ⁸⁸.